Best (and Worst) States to Grow Old

If you're angling for a comfortable retirement and you anticipate at some point you just might need some form of long-term care along the way -- whether it's a home health aide or full-blown nursing home care -- scratch Alaska from your best places to retire list, and add Texas and just about any state in the south to your contenders list.

The median annual cost for a semi-private room at a nursing home in Alaska is a whopping $222,285, according to a new long-term care survey by Genworth Financial. That's triple the national median cost of $70,445 and nearly five times more than the $46,335 median for Texas. Even if you remain in pretty solid health and just need some at-home assistance as you age, Alaska is still the priciest place to grow old with a median annual cost for homemaker services (44 hours a week) of $59,374. Alabama, with a median homemaker cost of $34,320 is the cheapest place to grow old if you're lucky enough to only need basic homemaker care. Just as a point of reference, the average annual Social Security benefit this year is less than $14,000.

The Cost of Longevity
Thinking about your much-older self may not be your idea of fun, but it isn't really something you can afford to ignore. Consider that there's a better than 6 in 10 chance that one spouse among a 65-year old married couple today will still be alive at age 90. Bet that's a higher probability than you might have guessed. And it's just common sense that those of us lucky to live long(er) will probably need some form of long-term care.

Companies that sell long-term care insurance -- and yes, the survey's sponsor, Genworth, is very much a player in this market -- love to lean on a government study that says two thirds of today's 65-year-olds will eventually need some sort of care during the rest of their lives. Fair enough. But that sure doesn't mean the entire two-thirds are destined for a super expensive nursing home. Having help at home is a lot less expensive, as is an assisted living facility. MoneyWatch's Steve Vernon has pointed out that many of us may indeed get lucky and only incur quite affordable long-term care costs. But that said, even the less expensive types of care can still end up costing you plenty. And I do mean you: Medicare coverage of long-term care is extremely limited, and that's before we even contemplate what changes might be coming down the pike if (when?) we finally get some meaningful deficit reduction legislation from Washington.

Let's run through the least and most expensive states for four levels of long-term care: Homemakers (basic cleaning and grocery/errand shopping); home health aides (help with bathing, dressing etc.); assisted living; and nursing home care. Granted, most of us aren't going to base our retirement spot solely on where the care is least expensive, but it's a bit of an eye-opener to see the wide variance.

At the Genworth website you can fiddle around and compare state vs. state long-term care costs as well as drill down to the median costs in specific regional areas. For example, the median annual cost to have a full time homemaker helping out in New York City is $44,616 this year. Cross a bridge over to Brooklyn and it's just $37,477.

When you're at the Genworth site, also be sure to check out the "future costs" estimate. In the table below I compared Alaska and Texas; the costs in a lovely shade are blue are what costs might be 30 years down the line.

The Adult Day Health Care is for 8 hours at a facility, 5 days a week.

Inflation is the long-term culprit, of course. Since 2005, the general pace of inflation has been just 2.3 percent, but Genworth says the annual cost increase at assisted living facilities has averaged nearly 6 percent, and 4.5 percent for a semi-private room. At-home care is not only less costly in real dollars but it's also growing at a slower pace as well; Genworth says inflation for home care has been less than the general inflation rate for the past six years.

If all those figures just aged you about 20 years, there's no simple solution. It's all about planning. Yes, long-term care insurance might be worth a look-see. Be sure to check out what Steve Vernon and Jane Bryant Quinn have to say about long-term care insurance first. Ramping up your up your 401(k) and IRA savings pace is another obvious way to respond. And don't overlook one of the least expensive ways you might be able to reduce the level of care you need decades from now: take good care of yourself today.